THE IMPACT OF WAGE RATE, EDUCATION, AND HEALTH STATUS ON WORKERS' PRODUCTIVITY IN INDONESIA

Abstract

The productivity of workers is a key indicator of the economic development potential in a specific area. This aspect necessitates a thorough examination of current scholarly works and the valuable input of policymakers. Therefore, this study seeks to examine and assess the various factors that impact the productivity of workers in Indonesia, including wage rates, unemployment, education, and health status. The study utilised secondary data obtained from the World Bank Indicators (WDI) for the period of 1991 to 2023. The study employed the dynamic autoregressive distributed lag (DARDL) approach to examine the relationships between variables. This study discovered that wage rate, unemployment, and education positively impact workers' productivity, while health status negatively affects it. Local governments should regularly adjust the minimum wage level to account for inflation in order to preserve the real wage level and ensure the purchasing power of workers remains intact. The government should ensure that workers have access to health insurance in order to maintain their health. The government should regularly release updates on the unemployment rate to enable individuals to adequately prepare for their entry into the labour market.